Press Release
February 1, 2006
CONSUMERS CANT AFFORD HIGHER VAT DUE TO UNFAVORABLE CONDITIONS
Senate Minority Leader Aquilino Nene Q. Pimentel, Jr. (PDP-Laban)
today expressed doubts whether the increase in the Value Added Tax
from 10 to 12 percent effective Feb. 1 will enable the government to
generate P82 billion to P100 billion in additional revenues this
year.
Pimentel maintained the view that the Filipino people in general
could hardly afford the added VAT imposition since their income has
remained static, if not gone down while the purchasing power of the
peso is declining due to inflation.
He cited official government reports that VAT collections last year
fell short of the targeted by P10.4 billion despite the
implementation of the expanded Value Added Tax (EVAT) law starting
Nov. 1, 2005.
According to the report, the Bureau of Internal Revenue collected
only P87.39 billion, or P7.31 billion short of target, while the
Bureau of Customs accounted for P69.4 billion in VAT collection, or
P3.1 billion short of target.
These figures indicate two things. First, consumers are not in a
position to absorb higher tax for essential goods that they
purchase. Second, the tax collection system remains inefficient and
efforts should be intensified to fix the leakages in the system,
Pimentel said.
The minority leader said that the government, instead of making the
VAT more burdensome for the ordinary consumers, should also
demonstrate more aggressiveness in going after big-time tax evaders
and smugglers.
Citing a study of the Federation of Philippine Industries, Pimentel
said the government is losing about P100 billion a year in customs
duties due to unabated smuggling.
He decried that the Bureau of Customs has miserably failed to clamp
down on the activities of the most notorious smugglers apparently
due to the protection of powerful personalities in the
administration.
Malacañang
is good only at making promises to carry out an all-out
campaign against tax evaders and smugglers but it is short of
action. How can you expect the common taxpayers to faithfully comply
with their tax obligation when the notorious tax dodgers remains
untouched, thanks to the protection of their patrons and godfathers
who are up there in the administration? Pimentel said.
He also warned that while the 12 percent VAT would bring greater
sufferings to Filipinos, it could also bring disaster to the Arroyo
administration by inflaming public anger. |